New Residential Housing Starts Down in April

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for April new residential housing starts.

The latest reading of 1.172M was below the Investing.com forecast of 1.260M. Revisions were made going back to January 2015.

Here is the opening of this morning's monthly report:

Building Permits

Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,229,000. This is 2.5 percent (±1.1 percent) below the revised March rate of 1,260,000, but is 5.7 percent (±1.4 percent) above the April 2016 rate of 1,163,000. Single-family authorizations in April were at a rate of 789,000; this is 4.5 percent (±0.8 percent) below the revised March figure of 826,000. Authorizations of units in buildings with five units or more were at a rate of 403,000 in April.

Housing Starts

Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,172,000. This is 2.6 percent (±8.8 percent)* below the revised March estimate of 1,203,000, but is 0.7 percent (±7.0 percent)* above the April 2016 rate of 1,164,000. Single-family housing starts in April were at a rate of 835,000; this is 0.4 percent (±8.6 percent)* above the revised March figure of 832,000. The April rate for units in buildings with five units or more was 328,000. [link to report]

Here is the historical series for total privately-owned housing starts, which dates from 1959. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

Housing Starts

The Population-Adjusted Reality

Here is the data with a simple population adjustment. The Census Bureau's mid-month population estimates show substantial growth in the US population since 1959. Here is a chart of housing starts as a percent of the population. We've added a linear regression through the monthly data to highlight the trend.

Housing Starts Population-Adjusted

A Footnote on Volatility

The extreme volatility of this monthly indicator is the rationale for paying more attention to its 6-month moving average than to its noisy monthly change. Over the complete data series, the absolute MoM average percent change is 6.3%. The MoM range minimum is -26.4% and the maximum is 29.3%.

For visual confirmation of the volatility, here is a snapshot of the monthly percent change since 1990.